The ‘Great Recession’ theoretically lasted about 18 months, from 2007 to 2009. Recovery has been agonizingly slow in several industries but we are now in 2015 and the construction industry is faster shrugging off the residual aftereffects of the recession.
How Bad Was It?
Even though construction industry is cyclical and recession typically follows a boom period, nothing could have prepared it for the harsh and widespread reach of the recession:
Residential: Homeowners defaulted on domiciles and others delayed buying domiciles, leading to a glut of residential real estate languishing in realtors’ inventory.
Commercial: Commercial construction also was hard hit, severely impacted by the federal budget sequester and eventual-but-temporary shutdown, followed by scaled back government spending, and sharply reduced lending methods.
Institutional: Institutional construction remained stagnant, affected by the same limitations and funding conditions that the commercial construction sector faced.
How Were Building industry workers Affected?
Nevada, California, Florida, and Arizona are typically areas with plenty of construction work. But the recession changed that:
Nevada employed an estimated 146, 000 construction workers at the peak of its construction boom. That number was reduced by 59 percent.
Arizona’s construction employment dropped 50 percent from its pre-recession industry peak.
Florida was close on the industry-related unemployment heels of Nevada and Arizona, losing 40 percent of its construction workforce.
California fared better but still recorded a 28 percent drop.
In line with the U. S. Bureau of Labor Statistics (BLS), approximately 2. 3 million building industry workers lost their jobs in the recession (nearly 30 % of the total number of lost jobs).
The overall construction industry has an estimated 1 . 4 million fewer construction workers in 2015 than it did in 2007.
The Construction Outlook in 2015 and Beyond
Happily, the U. S. and its construction industry continue to move away from the harshest effects of the Great Recession. Industry observers expect to see these improvements:
nonresidential construction: picking up and looking more solid, especially with the expected 2. 6 percent real GDP growth in 2015. This sector may possibly rise by 8 percent with growth in office buildings, hotels, and producers.
Single family housing: anticipated to increase by 11 percent in the number of residential units, thanks to easier access to mortgage loans.
Manufacturing plant construction: will likely drop about 16 percent after huge increases of 2013 and 2014.
Institutional construction: expected to continue its moderate upward trend and increase 9% over 2014 results.
Residential construction: called the potential ‘wild card’ of 2015 because of rising interest rates. Existing home sales may climb toward 10 %.
Public construction: growth will continue to be low due to ongoing federal spending constraints. However , transportation spending is expected to grow by about 2. 2 percent.
Ironically, construction workers might not be rushing to return to new jobs. Many left the industry altogether, retraining for other employment.
Economists don’t are expectant of the construction industry to go back to its peak level (2006) until 2022 or later. However , the BLS anticipates that the fastest-growing jobs now and 2022 will be in healthcare and construction.